A tour of world currency markets with John Taylor

Chrystia interviewed currency maven John Taylor this morning to kick off the Reuters 2011 Investment Outlook Summit. Taylor is the chairman and CIO of FX Concepts, the largest currency hedge fund in the world, with around $8.5 billion in assets under management.

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Taylor led Chrystia on a tour of world currency markets and offered his predictions for 2011, including:

–The euro will sink to parity with the dollar, thanks to a debt crisis in Spain.
–Switzerland, which is a “little Brazil,” will see the franc rise against the euro as capital leaves the eurozone.
–The Australian dollar will depreciate by 15 or 20% due to a fall-off in commodity and housing prices.
–The Canadian dollar will depreciate to C$1.15 vs. the dollar on lower commodity prices and lower growth in the U.S.
–Sterling will appreciate against the euro.
–The Brazilian real is attractive but its outlook is uncertain given the Brazilian’s government’s determination to tame appreciation. On the other hand, investors like Taylor who are bullish on Brazil may have more ammunition than the government, thanks to the Federal Reserve and the resurgence of the carry trade.

[…] formation until today’s new high confirmed this pattern to be misleading. Traders like John Taylor of FX Concepts are predicting a risk-reversal to occur as early as tomorrow. If such an event happens, a general decline in commodities is […]

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